Equity Incentive Plans — Under the Company’s 2018 Equity Incentive Plan (the “2018 Plan”), approved at the annual meeting by the BioScrip stockholders on May 3, 2018, the Company may issue, among other things, incentive stock options, non-qualified stock options, stock appreciation rights, restricted stock units, stock grants, and performance units to key employees and directors. The 2018 plan is administered by the Company’s Compensation Committee, a standing committee of the Board of Directors. A total of 4,101,735 shares of common stock were initially authorized for issuance under the 2018 Plan.

Stock Options — Options granted under the 2018 Plan typically vest over a three- or four-year period and, in certain instances, may fully vest upon a change in control of the Company. The options also typically have an exercise price that may not be less than 100% of its fair market value on the date of grant and are exercisable seven to ten years after the date of grant, subject to earlier termination in certain circumstances.

Compensation expense from stock options is recognized on a straight-line basis over the requisite service period. During the years ended December 31, 2020 and 2019, the Company recognized compensation expense related to stock options of $0.4 million and $0.4 million. The Company did not recognize any compensation expense related to stock options prior to the Merger.

The weighted average grant-date fair value of options granted during the year ended December 31, 2020 was $5.94. The Company did not grant any options during the years ended December 31, 2019 or 2018. The fair value of stock options granted was estimated on the date of grant using a Black-Scholes pricing model. The assumptions used to compute the fair value of options for the year ended December 31, 2020 are as follows:


	Options	Weighted Average Exercise Price		Aggregate Intrinsic Value (thousands)		Weighted Average Remaining Contractual Life
Balance at December 31, 2019	644,975	$	15.36	$	2,754
Granted	204,928	$	13.34	$	471
Exercised	(266,065)	$	7.63	$	2,548
Forfeited and expired	(171,007)	$	26.36	$	88
Balance at December 31, 2020	412,831	$	14.77	$	1,320	6.7 years
Exercisable at December 31, 2020	197,735	$	16.51	$	789	4.2 years

During the year ended December 31, 2020, shares were surrendered to satisfy tax withholding obligations on the exercise of stock options with a cost basis of $2.7 million. During the year ended December 31, 2019, shares were surrendered to satisfy tax withholding obligations on the exercise of stock options with a cost basis of $0.4 million, which are all held as treasury stock as of December 31, 2020. During the year ended December 31, 2020, $0.4 million of cash was received from stock option exercises under share-based payment arrangements. No cash was received from stock option exercises under share-based payment arrangements for the years ended December 31, 2019 or 2018.

The maximum term of stock options under these plans is ten years. Options outstanding as of December 31, 2020 expire on various dates ranging from January 2021 through March 2030. The following table outlines the outstanding and exercisable stock options as of December 31, 2020:


	Options Outstanding				Options Exercisable
Range of Option Exercise Price	Outstanding Options	Weighted Average Exercise Price		Weighted Average Remaining Contractual Life	Options Exercisable	Weighted Average Exercise Price
$0.00 - $8.24	9,901	$	6.52	6.1 years	9,901	$	6.52
$8.24 - $16.52	345,180	$	12.08	7.5 years	130,084	$	10.27
$16.52 - $24.76	25,500	$	22.61	2.7 years	25,500	$	22.61
$24.76 - $33.00	15,000	$	30.41	2.3 years	15,000	$	30.41
$33.00 - $41.28	—	$	—	0.0 years	—	$	—
$41.28 - $49.52	12,500	$	44.16	1.3 years	12,500	$	44.16
$49.52 - $57.76	3,500	$	56.24	2.0 years	3,500	$	56.24
$57.76 - $66.00	—	$	—	0.0 years	—	$	—
$66.00 - $74.28	1,250	$	66.52	2.6 years	1,250	$	66.52
All options	412,831				197,735

As of December 31, 2020, there was $1.0 million of unrecognized compensation expense related to unvested option grants that is expected to be recognized over a weighted-average period of 1.8 years.

Restricted Stock — Restricted stock grants subject solely to an employee’s continued service with the Company generally will become fully vested within one to four years from the grant date and, in certain instances, may fully vest upon a change in control of the Company. Restricted stock grants subject solely to a Director’s continued service with the Company generally will become fully vested within one year from the date of grant.

Compensation expense from restricted stock is recognized on a straight-line basis over the requisite service period. During the years ended December 31, 2020 and 2019, the Company recognized compensation expense related to restricted stock awards of $2.3 million and $1.9 million, respectively. The Company did not recognize any compensation expense related to restricted stock awards prior to the Merger.


	Restricted Stock	Weighted Average Grant Date Fair Value
Balance at December 31, 2019	231,562	$	10.68
Granted	490,557	$	13.32
Vested and issued	(120,782)	$	12.15
Forfeited and expired	(51,687)	$	12.92
Balance at December 31, 2020	549,650	$	13.26

During the year ended December 31, 2020, shares were surrendered to satisfy tax withholding obligations on the vesting of restricted stock awards with a cost basis of $0.3 million. During the year ended December 31, 2019, shares were surrendered to satisfy tax withholding obligations on the vesting of restricted stock awards with a cost basis of $2.1 million, of which $2.0 million is held as treasury stock as of December 31, 2019.

As of December 31, 2020, there was $6.0 million in unrecognized compensation expense related to unvested restricted stock awards that is expected to be recognized over a weighted average period of 1.7 years. The total fair value of restricted stock awards vested during the years ended December 31, 2020, 2019 and 2018 was $1.5 million, $1.9 million and $0, respectively.

HC I Incentive Units — Beginning in October 2015, HC I implemented an equity incentive plan for certain officers and employees of the Company. Incentive units are equity-based awards subject to time and performance vesting restrictions. The compensation expense related to this plan has been reflected in the Company’s financial statements.

In accordance with ASC Topic 718, Compensation-Stock Compensation, compensation expense is recognized on a straight-line basis over the vesting period of the award or the employee’s retirement eligible date, if earlier. During the years ended December 31, 2020, 2019 and 2018, the Company recognized compensation expense related to the HC I incentive units of $0.2 million, $1.9 million and $2.1 million, respectively.

No awards were issued during the year ended December 31, 2020. The fair value of each award was determined using a Monte-Carlo simulation with the following weighted average assumptions:


Risk-free interest rate (1)	2.25	%
Average time to liquidity (years) (2)	2.1 years
Volatility (3)	47.00	%
Discount for lack of marketability (4)	30.00	%
Weighted-average grant-date fair value per share	$1.13

(1) Represents the US Treasury security rate for the expected time to liquidity event.
(2) Represents the period of time expected prior to liquidity event.
(3) Based on historical volatility of comparable public companies.
(4) Represents a discount taken to reflect the private nature of the investment.